Exchange Rates

6. The United States adopted the gold standard in 1879 and defined the U.S. dollar as $1 = 23.22 grains of fine gold. With 480 grains per troy ounce, it took $20.67 to equal one ounce of gold. Similarly, the British pound was defined as f1 = 113 grains of fine gold. So it took 4.2474 to equal one ounce of gold. What was the exchange rate between the dollar and the pound according to the law of one price? Your answer: $. (Keep four decimals; Do not include the "$" or "," symbols in your answer.) 7. According to the Economist ("Big Mac Currencies," The Economist, April 17th 1993), in 1993, the average price of a Big Mac in the U.S. was $2.28. In Japan, Big Mac fans had to fork out Y391 for this feast. However, in the currency market on April 13th, 1993, yen- holders could buy a dollar for Y113. What was real exchange rate for the $ against the Y? Your answer: (Keep four decimals; Do not include any symbols or signs in your answer.)